If an Itan franchisee independently develops information, is it considered 'Confidential Information'?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Confidential Information does not include information that: (a) is now, or subsequently becomes, generally available to the public (except as a result of a breach of confidentiality obligations by you, Franchisee or Franchisee's owners, employees or other constituents); (b) you can demonstrate was rightfully in your possession, without obligation of nondisclosure, before we (or any person associated with us) or Franchisee (or any person associated with Franchisee) disclosed the information to you; (c) is independently developed by you without any use of, or reference to, any Confidential Information; or (d) is rightfully obtained from a third party who has the right to transfer or disclose the information to you without breaching a confidentiality covenant imposed on such third party.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, information that an Itan franchisee independently develops is not considered confidential information, provided that the development occurred without using or referencing any of Itan's confidential information. This means that if a franchisee comes up with a new idea, process, or technique for the salon independently, Itan does not consider that information to be confidential.
This exclusion protects the franchisee's ability to innovate and use their own knowledge and experience without fear of violating the franchise agreement. However, it is crucial for the franchisee to document the independent development process to demonstrate that it was indeed created without relying on Itan's confidential information.
It is important to note that while independently developed information may not be classified as confidential, Itan may still have rights to improvements made to the Itan system. The franchisee agrees to assign to Itan or its designee, without charge, all rights to any Improvement developed by them, including the right to grant sublicenses. If applicable Law precludes the franchisee from assigning ownership to Itan, then the franchisee agrees to perpetually license the Improvement to Itan, free of charge, with full rights to use, commercialize and sublicense the same. This means that while the franchisee may own the initial idea, Itan retains the right to use and commercialize any improvements made to the Itan system.